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The Penny Has Dropped: Cash and its Place in a Digital Society

By Ian Bradbury, CTO for Financial Services, Fujitsu UK

Physical cash has been a pivotal part of society for decades, but the rise of digital technology has more recently led to cash payments falling in popularity, as people in the UK increasingly use card and contactless payments.

While the introduction of new digital services has brought a long list of benefits for consumers, the disappearance of ATMs and easily accessible cash services is disadvantaging the 2.2 million people in the UK who still rely on cash to support themselves. 

What this means is that banks need to offer a balanced service, to cater for those who want to adopt more and more digital services but also ensure they maintain support for the cash infrastructure that millions of consumers still require. Shunning one group to benefit the other will only erode trust among a sizeable consumer base; something they cannot risk if they are to build solid foundations for digitisation in the future. 

From cash to cashless

While many people have adopted digital services such as mobile banking, there is still a sizeable proportion of the population that is reliant on cash. 

There are legitimate reasons why some people still rely on cash; for example, some are ‘unbanked’ and don’t operate a bank account. In 2017, it was estimated that 1.23 million of the British population were unbanked, which may be small as a proportion of the British population but is a number that is still high enough for banks to sit up and take notice. 

But in a digital age, it begs the question as to why so many people are still without a bank account. There are certain issues that people face in the application process; for instance, one of the largest stumbling blocks is identity – banks require a level of formal identification before allowing someone to have a bank account for obvious safety reasons. In those cases, banks and public bodies have a shared responsibility in helping those people to get the identification required.

There has been a response from the industry to ensure more is done to protect the cash infrastructures that are vital to the UK economy but there is still a way to go for organisations to cooperate to ensure that those who are unbanked are not left behind in the digital age. 

While many people have adopted digital services such as mobile banking, there is still a sizeable proportion of the population that is reliant on cash. 

Trust will be key as banks develop their digital offerings

While support for these infrastructures must continue, it is inevitable that the wider population will begin to adopt digital banking. And while banks digitise, providing an equal amount of support to vital cash networks will show customers that they have each and every customer  in mind. 

Trust will ultimately be a defining factor for banks moving forward. The financial services industry has undergone an overwhelming change; the social purpose of the industry is no longer the same as it was 20 years ago. Given the vast amount of data institutions hold, they are expected to take greater care of their customers’ money and have more responsibility towards their financial wellbeing. And as customers put more trust in banks to store their money digitally, they put an equal amount of faith in that money being stored securely.

There is a compelling argument to be made that while digital banking makes finances easier and quicker, it has also created its own security problems. Many banks have come under fire for these issues and new regulations such as Strong Customer Authentication have been brought in to ensure institutions are doing their utmost to protect their customers through measures such as multi-factor authentication. 

Good security will be critical for organisations to build trust with their customers in their digital offerings. Our recent research found that 52% of financial services business leaders admitted that public or customer nervousness has stopped their organisation from adopting certain technologies. Therefore, there is a case that banks are being held back from innovating by mistrust from the public.

Looking at the big banking picture

As banks and other financial institutions continue to adopt technology, it is still critical that they continue to support the cash infrastructures that so many consumers rely on. And while a significant investment should go into protecting those who have stored their money digitally, there needs to be similar levels of investment to those who have not. We as an industry ultimately have a responsibility to do our best to benefit all of our customers.

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